Unemployment, Intervention and Capabilities The Cases of Germany and Spain Outline of Comparative Work (QUIT) Martí López Andreu Joan Miquel Verd WP3: Palma, Spain, 30th Sep. 2010 (SOFI) Peter Bartelheimer René Büttner Tanja Schmidt
Structure of presentation 1. Institutional intervention and capabilities in situations of unemployment Theoretical model and concepts 2. Resources and conversion factors German and Spanish national contexts compared The institutional side of unemployment Labour markets 3. Methods and data From (quantitative) clusters to (qualitative) cases 4. Possible results and conclusions
Genoa WP3 meeting, March 2010 First joint presentation, first mixed team meeting Berlin, July 2010 Second mixed team meeting Palma WP3 meeting, September 2010 Second joint presentation, third mixed team meeting CAPRIGHT Final Conference, Nantes Presentation of results, fourth mixed team meeting to edit paper»transfer«paper Palma Nantes»Transfer«A plan for joint work December 2010; moved forward from June 2011
(1) Institutional intervention and capabilities in situations of unemployment Theoretical model and concepts
The standard model of social policy evaluation Recognised needs of population at risk Utility Outcomes for population at risk Input Operation, Process Output Policy objectives Effectiveness Efficiency Effects on policy objectives
Capabilities in individual working lives a shift in policy evaluation paradigm Individual outcomes as evaluation criterion (»basis of judgement«) Do programs promote access to otherwise inaccessible functionings? Do programs enlarge capability sets (options, counterfactual functionings)? Policy objectives To what extent do programs pre-define capabilities or functionings? Do policies take diversity of needs into account? Inputs How sensitive are entitlements to unequal life courses as cumulative (dis-) advantages Process Do services leave clients room for co-production, agency and choice? Outcomes Do outputs correct inequalities in capability sets over life course?
Institutional intervention and capabilities in situations of unemployment Institutional resources, conversion factors intervention Welfare state context State at t Unemployment spell Capability set (real options) increase due to intervention? State at t+1 chosen real option Life course profile past cumulative functionings, sets of options, conversion factors personal resources, conversion factors Labour market conditions Effects on life course profile future cumulative functionings, sets of options, conversion factors
Capability space in situations of unemployment Three subsets of options to end unemployment transition into employment training (e.g. to improve employability) exit from labour force (options outside of paid work) Informational base of judgement at odds with EU activation policy All individual options to cope with unemployment are equally acceptible EU activation policy gives priority to earliest possible transition into employment
Resources specific to situations of unemployment Resources of Public Employment Service (PES) financial supports (cash transfers) for labour market reasons based on labour force status (unemployment status, job seeker) functions: search subsidy and income support terms of entitlement: insurance benefits, means tested assistance (allowance) level (average rates, replacement rates), duration client services (main activitty job-search related) based on labour force status (unemployment status, job seeker)»active«measures (main activity other than job-search related) can result in change of labour force status Other resources family support, networks
Conversion factors specific to situations of unemployment Personal conversion factors, e.g. working life profile: e.g. prior education & training career, work experience, professional orientation family and household situation, gender arrangements for care work Societal conversion factors, e.g. labour market conditions conditions of use for employment service resources. rules of entitlement (benefit / allowance) degree of individualisation, discretionary power of case workers governance of public employment service Public perception of unemployment
(2) Resources and conversion factors German and Spanish national context compared The institutional side of unemployment Labour markets
Resources for unemployed in Germany Change of path in labour market policy»hartz«reforms (2003-2005) Two-tier system of public employment service Federal Employment Agency (minority system): Unemployed with contributory earnings-related unemployment benefit I (67%, resp. 60% of last gross earnings, duration 6 to 24 months) Unemployed / job seekers not entitled to income support Co-governed local job centers (majority system): Unemployed entitled to (reformed) unemployment benefit II (means-tested pooled family income, 359 subsistance flat rate + rent + supplements) All job offers are considered suitable Less preservation of status and employability Strict activation, adaptation of job-seekers to market needs Compulsory participation in counseling and active measures sanctions for non-compliance with individual integration contracts
Resources for unemployed in Spain Contributory benefit Income support (min. 12 months = 4 months; max. 66 months = 24 months) 70% resp. 60% of medium wage Entitlements to benefits not exhausted are preserved Occupational training Poorly provided by Public Emplyoment Service Training mostly provided by other institutions Conditionality (compromiso de actividad): Formally obligation to follow training and individual plan, but this isn t the case in practice (weak and decentralised active policies). Unemployment allowance 75% of minimum national wage ( 624 for special collectives, six months duration Extraordinary»benefit«420 for unemployed without benefit, six months duration
Labour markets compared (1) The Spanish labor market is more turbulent Indicator Year, source Germany Spain Share of fixed-term contracts 2008, EU-SILC 10,84% 33,66% Job tenure 2006, Eurobarometer 38,00% 28,00% Job loss 2005-2006, EU-SILC 4,15% 4,79% This also affects the nature of unemployment Spain has lower long-term unemployment Indicator Year, source Germany Spain Unemployment rate 2005, Eurostat 10,70% 9,20% Long-term unemployment rate 2005, Eurostat 5,90% 2,20%
Labour markets in comparison (2) Subjective perception of labour market risks Indicator Year, source Germany Spain Subjective job security 2006, Eurobarometer 90,0 86,0 Confidence in finding a new job 2006, Eurobarometer 5,6 6,3 Difference between insiders and outsiders is more important in Germany, while in Spain the segment of those in-between is larger Indicator Year, source Germany Spain Share of active population without stable inclusion in the labor market 2005-2006, EU-SILC 17,42% 21,47%
Labour markets in comparison (3) Gender difference: German women more often economically»active«, but not in case of motherhood, and often only part-time. Indicator Year, source Germany Spain Difference of male and female activity rates 2005, EUROSTAT Difference of male and female activity rates 2005, EUROSTAT 80,6% 69,0% 13% 23,4% Share of economically active mothers of children aged 3 to 5 2005, OECD 54,8% 54,2% Share of female part-time 2005, EUROSTAT 45,6% 23,2% Difference of male and female part-time employment 2005, EUROSTAT -35,7% -19,7% Share of involuntary part-timers 2005, OECD 17,7% 30,5%
Labour markets in comparison (4) Difference in unmployment»history«: Recent convergence of unemployment rates from different starting points. Unemployment rates in Germany and Spain (%) 25 20 15 10 5 0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Deutschland Spanien People may have developed different expectations, and different coping strategies in the two countries.
National context of unemployment experience Germany and Spain as contrasting cases Activation regimes and response to EU employment strategy Germany: paradigm shift to»activating«labour market PES supports enforce a specific type of functioning Spain: little effect on policy (non-compliance with»activation«) Basic income support Germany: Basic assistance as most important income support Norm of family support reintroduced Spain: dominance of contributive benefit, weak basic assistance Compensated by strong role of family support Social construction of unemployment Germany:»voluntary/unvoluntary«unemployment: blame on individual Spain: accepted social responsability for unemployment as a collective risk
(3) Methods and data From (quantitative) clusters to (qualitative) cases
Mixed method approach Comparative re-analysis of quantitative / qualitative research data First (quantitative) stage: establish profiles of working lives Research function Define different biographical contexts for unemploment eperience Entry point for selecting typologically representative individual cases Data base: longitudinal survey data Spain: Panel Survey on Inequalities in Catalonia (PaD) Five waves 2001/02, 2002, 2003, 2004, 2005, 2006 Germany: German Socio-economic Panel (GSOEP) Waves 1984-2007, retrospective biographical data Second (qualitative stage): reconstruct individual working lives Spain: Narrative biographical interviews n=18 Germany: Reconstruction of case stories (biographies) from GSOEP n=10
Longitudinal data for Germany (1): Main employment age, individual cluster solution GSOEP birth cohorts: 1951-1955, 1961-1965, 1971-1975 monthly observation 1991-1995, 2001-2005, age 31-50, N=3832 Analysis based on monthly employment status Full-time, part-time, unemployment, family work, other Method of analysis: sequences, optimal matching, clustering Main employment age clusters: M1) Continuous fulltime employment (52,1%; m>f) M2) Part-time employment (12,3%; f>m) M3) Discontinuous path (13,3%; f>m) M4) Precarious path (11,0%; f>m) M5) Family work cluster (11,3%;f)
Longitudinal data for Germany (2): Another cluster solution, accounting for children Main employment age clusters, households with children <16 years MC1) Continuous fulltime employment with children (23,9%; m>f) Continuous fulltime employment (M1) MC4) Continuous fulltime employment without children (5,4%; m>f) Continuous fulltime employment (M1) MC7) Continuous adult fulltime employment without children (30,1%; m=f) Continuous fulltime employment (M1) MC5) Continuous part-time employment with children (11,2%; f) Part-time employment (M2) MC3) Discontinuity fulltime employment with children (6,9 %; f) Discontinuous path (M3), Precarious path (M4) MC2) Precarious unemployment cluster with and without children (11,9 %; f) Part-time employment (M2), Discontinuous path (M3), Precarious path (M4), Family work cluster (M5) MC6) Family-worker with children (10,7%; f) Family work cluster (M5)
Longitudinal data for Germany (3): controlling for patterns of transition into adulthood GSOEP birth cohorts: 1968-1971, 1973-1976 monthly observations 2001-2006, age 17-30, N=545 Analysis based on multidimensional states, status dimensions Working live Household formation Family formation Parenthood Method of analysis: sequences, optimal matching, clustering Clusters of transition from youth to adulthood: Y1) Long / recurrent education, late household formation (18,3%, m > f) Y2) Stable labour market integration, late household formation (20,2%,m > f) Y3) Labour market integration, household formation (12,1% m=f) Y4) Training and employment, late family formation (15,2% m=f) Y5) Training and employment with early family formation (24,2% f > m) Y6) Family formation, parenthood, short/intermittent employment (9,9%, f>m)
Longitudinal data for Germany (4): transition from youth to main employment age Persons who are in both samples: born 1973-1975, N=79 M/Y Y1 Y2 Y3 Y4 Y5 Y6 Total M1 6 13 10 5 7 0 41 M2 4 0 1 1 0 2 8 M3 2 2 1 1 2 0 8 M4 2 1 0 3 6 3 15 M5 0 0 0 0 4 3 7 Total 14 16 12 10 19 8 79
From German clusters to cases Cases with unemployment included in both cluster analysis Youth clusters: Y4: Training and employment, late family formation share with at least one spell: 35,5%; share of total time: 6,8% Y5: Training and employment with early family formation share with at least one spell: 19% + 35,3%; share of total time: 3,8% Main employment clusters: M3: Discontinuous path share with at least one spell: 60,4%; share of total time: 12,5% M4: precarious path share with at least one spell: 54,9%; share of total time: 23,7% Biographical description constructed from all available survey items Special interest in working lives covering unemployment support change in 2005
Longitudinal data for Spain (1) Inequalities Panel (PaD) for Catalonia, 2001-2006 Cluster analysis of people employed at least one time in the period, between 25-65 years old (884 cases) Variables of the cluster analysis Frequencies of unemployment, fixed-term contract, inactivity and nonformal training Transitions from unemployment to employment, from fixed-term to openended contract, and increase in education level Paths: Linear (40,6%) Professional (21,4%) Female discontinuity (7,9%) Precarious (21%) Chronic temporality (9,2%)
Paths (25-65) Integrated project CIT4 CT 2006 028549 co funded by the European Commission Longitudinal data for Spain Unemp. ABCDE Fixed term ABCDE Inact. ABCDE Unempl. trans. AE Contract trans. AE Nonformal training Educ. trans. A-E Linear Mean,07,03,08 -,04,00,06,21 N 359 359 359 359 359 359 359 Prof Mean,09,02,06,02,00 1,38,01 N 186 186 186 186 186 186 186 Female disc. Prec. Ch. temp Mean,27,33 3,06,13,01,17,04 N 70 70 70 70 70 70 70 Mean,57 1,72,42,08,03,45,10 N 189 189 189 189 189 189 189 Mean,11 4,06,11,06 -,40,70,25 N 80 80 80 80 80 80 80 Total Mean,20,78,39,02 -,03,49,13 N 884 884 884 884 884 884 884
From clusters to cases, interviews considered Unemployment incidence differs by path Precarious path: 34,4%, female discontinuity: 27%, chronic temporality: 10% More that two spells occur only in precarious path Majority of population under 40 in non-standard paths Linear: 5.9%, Professional (7%). Only Precarious more than two times. Biographical interviews to be taken from which paths? Precarious path de-standardization of traditional working class paths massive incorporation of women with medium-low education level higher presence of unemployment. Chronic temporality Higher education level, fixed term and atypical contractual forms Unemployment lower and less sporadic. Linear path for contrasting unemployment experience Female discontinuity? Older women of traditional working class
Grid for comparative analysis of cases: unemployment in individual working lives Time / age (recorded changes, at least annual information) Transitions, subjective information on options, motives and aspirations Professional Life - Stages and States (functionings) Training (state), labour situation (state), type and amount of income Job search Intentions, preferences, actions Professional future Personal outlook (capability) Personal life Situation (household, partnership, parenthood) Informal work, care work Subjective values and concerns Life satisfaction Socializing Situation of partner / spouse
(4) Possible results and conclusions Based on partial analysis of cases
Pro s and con s of Spanish non-compliance with activation Standardized cash benefit increases individual capability Unemployment benefit as least conditional income support Entitlement considered as»savings account«for use in need Many individual uses of paid free time Job search (find employment) Occupational training (mostly not provided by PES) Additional / continuing formal education Care work for children or relatives (women) Time out of work to decide what to do next (higly educated workers) Contrary to neoclassics, claimants remain active and labour market oriented benefits prolong inequality in capability sets Contributory benefit prolongs acquired stability or precariousness Family support, weak»combination security«as conversion factors Family support not unconditional benefits work for traditional gender regime
German public employment service a model student of»activation«individualized»taylored«public employment services and measures Services are more present in people s lives PES as important training provider»correcting«precarious training careers How strong is actual impact of»prescribed«functionings? What is the relative role of other welfare state programs as collective supports? What other conversion factors intervene? How»sustainable«are effects? Does PES end or administer precariousness? Are path changes supported? Trade-offs between»taylored«intervention and individual choice Do cases suggest criteria for»capability-friendly«pes supports
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